Canada Improves its Global Competitiveness Ranking

Released November 12th, 2002

Canada moved from 12th to 10th place in a global ranking of its economic competitiveness according to the “Global Competitiveness Report 2002-2003” released today by the World Economic Forum. The Forum’s Canadian partner is the Toronto-based Institute for Competitiveness and Prosperity.

Canada’s ranking is based on the “Microeconomic Competitiveness Index” developed by Michael Porter, Director of the Institute for Strategy & Competitiveness of the Harvard Business School. The Index draws on economic data and surveys of more than 4,800 business leaders around the world to develop microeconomic indicators that measure the set of institutions, market structures, and economic policies supportive of high national prosperity.

The Microeconomic Competitiveness Index consists of two sub-indexes, the quality of the business environments - financial markets, the balance of competition and co-operation in the economy, and public administrative effectiveness - where Canada improved from 11th to 7th - and the sophistication of companies’ operations and strategies where Canada improved from 14th to 13th.

Roger Martin, Dean of the University of Toronto’s Rotman School of Management and Chairman of the Institute for Competitiveness and Prosperity, the Canadian partner for the Global Competitiveness Report 2002-2003 was pleased with the improvement in Canada’s ranking on the Microeconomic Competitiveness Index. “It’s great to return to the top ten in global rankings. I’m hoping this is the start of the reversal of our downward trend. In 1998 we ranked 6th and fell every year after that until we hit 12th last year.” He noted that Canada’s improvement from 11th to 7th in the business environment ranking was driven by improvements in measures designed to track the development of industry clusters. But he pointed out that to realize future improvements Canada will need to strengthen it 13th ranking in the sophistication of its companies’ strategies and operations. “Our Canadian firms need to heighten their aspirations for global competitiveness if we want to strengthen our productivity and standard of living.”

In the World Economic Forum’s other global index, the Growth Competitiveness Index, Canada fell from 3rd to 8th, but largely as the result of a change in one of the measurement standards making up the Index. The Growth Competitiveness Index estimates the underlying prospects for growth over the next five to eight years. It consists of three sub-indexes which measure the quality of each country’s “technology”, “public institutions”, and “macro-environment”. Canada fell from 2nd to 8th in the technology ranking because of a change in the way post-secondary enrollment is calculated by UNESCO. In the other two sub-indexes, Canada actually improved its ranking from 11th to 9th and from 13th to 12th respectively.

Full details of the Global Competitiveness Report 2002-2003 can be found at http://www.weforum.org or by contacting .(JavaScript must be enabled to view this email address)

About the Institute for Competitiveness and Prosperity
The Institute for Competitiveness and Prosperity is an independent not-for-profit organization established in 2001 to serve as the research arm of Ontario’s Task Force on Competitiveness, Productivity and Economic Progress. It is also the Canadian partner of the World Economic Forum.

Working Papers published by the Institute are primarily intended to inform the work of the Task Force. In addition, they are designed to raise public awareness and stimulate debate on a range of issues related to competitiveness and prosperity.

For more information contact James Milway, Executive Director of the Institute for Competitiveness and Prosperity at 416.920.1921 ext. 222.